Yahoo Finance Looking to Retire Soon? These 4 Stocks May Be Suitable for You
Retirement is meant to be an idyllic time as you hang up your working boots and enjoy time with your family while pursuing your passions.
As such, your investment portfolio needs to generate a steady stream of passive income that can sustain your pre-retirement lifestyle.
Aside from this income, you also want to ensure that the stocks you own are resilient and can withstand periodic bouts of economic volatility.
Armed with these requirements, you should then seek out stocks with stable businesses and strong franchises that pay out consistent dividends.
Here are four stocks that we believe will be suitable for retirees.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
SGX enjoys a natural monopoly and the group has also been increasing the variety of investment options it offers to its clients.
The bourse operator reported an encouraging set of earnings for its fiscal 2023’s first half (1H FY2023).
Revenue was up 10% year on year to S$571 million while net profit jumped by 30% year on year to S$285 million.
Excluding non-recurring and one-off items, SGX’s net profit would still have risen by 7% year on year to S$237 million.
The group has declared an interim dividend of S$0.08 for the quarter, bringing its forward 12-month dividend to S$0.32.
SGX’s derivatives division saw a 28% year on year increase in revenue, because of gains across asset classes and record volumes logged for certain contracts.
Meanwhile, the group’s over-the-counter foreign exchange (FX) business is doing well, contributing to 6% of total revenue.
SGX anticipates that this division can hit an average daily volume of US$100 billion, up from the present US$68 billion.
Haw Par Corporation Limited (SGX: H02)
Haw Par is a conglomerate with four distinct divisions – healthcare, leisure, property, and investments.
Its healthcare division is the owner of the Tiger Balm brand, one of the world’s leading topical analgesic brands that is sold in over 100 countries.
Haw Par generates healthy free cash flow every year and also enjoys dividend income from its stakes in United Overseas Bank Ltd (SGX: U11) and UOL Group Ltd (SGX: U16).
The group proposed a final dividend of S$0.15, similar to the amount paid out a year ago.
Coupled with the interim dividend of S$0.15, Haw Par’s total 2022 dividend stands at S$0.30.
Its latest 2022 earnings showed a strong recovery, with revenue up 29% year on year to S$182.1 million and net profit jumping 34.7% year on year to S$148.3 million.
Singapore Technologies Engineering Ltd (SGX: S63)
Singapore Technologies Engineering, or STE, is a defence and engineering conglomerate that serves businesses in the aerospace, smart city, and public security sectors.
Temasek Holdings owns nearly 50% of STE and is its largest shareholder.
2022 saw the conglomerate report a 17.4% year on year rise in revenue to S$9 billion.
However, net profit dipped by 6.2% year on year to S$535 million.
Excluding government support and one-off items, STE’s net profit would have surged by 39% year on year to S$549 million.
A final dividend of S$0.04 was declared, bringing the total dividend for 2022 to S$0.16.
STE is well-positioned to ride the recovery of the aviation industry which should benefit its aerospace division.
The engineering group secured a total of S$13.1 billion in new contracts for 2022, bringing its order book as of 31 December 2022 to S$23 billion.
OCBC Ltd (SGX: O39)
OCBC needs no introduction, being Singapore’s second-largest bank.
The lender forms one of the three pillars of Singapore’s banking scene and recently reported a stellar set of earnings for 2022.
Net profit for the bank climbed 18% year on year to hit a record high of S$5.7 billion last year.
The strong performance was the result of higher interest rates that helped to boost both the lender’s net interest margin and net interest income.
To reward shareholders, OCBC hiked its final dividend by 43% year on year from S$0.28 to S$0.40.
For 2022, the total dividend came up to S$0.68, 28% higher than 2021’s S$0.53.
OCBC remains confident that it can continue to deliver growth.
Net interest margin is expected to stay high at around 2.1% while China’s reopening should provide a much-needed economic boost.
The lender also targets to achieve a mid-single-digit year on year growth for its loan book.
Our team has spent decades scouring SGX for stocks. And we think dividends could be the answer to rising inflation and market uncertainty in 2023. With our newest FREE report, you’ll have everything you need to find, keep and make more money from dividend stocks. Click here to download it for free.
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Disclosure: Royston Yang owns shares in Singapore Exchange Limited.
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